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AMC Thinks It Has Enough Cash to Survive Until July -- And Maybe Longer

A $500 million loan could tide AMC over through Thanksgiving.

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Will all of this be enough to keep the movie theaters from going under?

Image source: Getty Images.

AMC thinks so. That is, if business returns to normal by July.

In a filing with the SEC last night, AMC updated investors on risk factors affecting its business, and specifically, factors related to COVID-19, in connection with the company's seeking to issue $500 million in first lien notes due 2025 (i.e. borrow $500 million).

First, the good news: AMC says that as of March 31, it had a cash balance of $299.8 million. This, AMC says, is "sufficient to withstand a global suspension of operations until a partial reopening in July."

Now here's the bad news: Little of this cash is actually AMC's. Rather, $215 million of AMC's cash balance was borrowed under a $225 million senior secured revolving credit facility due April 22, 2024. Another $111.46 million was borrowed in the form of British pounds sterling under a 100 million pound revolving credit facility due February 14, 2022.

Moreover, in total, AMC is carrying some $10.35 billion in debt. Now, AMC wants to add $500 million in additional debt, hoping such monies will give the company "sufficient liquidity to withstand a global suspension of operations until a partial reopening ahead of Thanksgiving."

The implication: If it doesn't get the money, AMC could go bankrupt in July.